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Residential Property

Residential Property

What is a Sale and Purchase Agreement?

The Sale and Purchase Agreement is a legally binding contract outlining the agreed conditions of the buyer and seller of a property. If you are using a real estate agent, they will probably use the ADLS form from the Auckland District Law Society and Real Estate Institute of New Zealand.

The agreement should include the following:

  • Names(s) of the buyer and seller
  • Property’s address and type of title
  • Any chattels to be sold with the property (for example, drapes, white ware, light fittings and fixed floor coverings)
  • Price
  • Rate of interest for late settlement
  • Deposit amount
  • Any buyer conditions
  • Date when the agreement becomes unconditional
  • Settlement date

Why do we need a lawyer to review the Sale and Purchase Agreement?

It is wise to have your lawyer view the draft Sale and Purchase Agreement before you sign – this is for both a private sale and one through a real estate agent – as once signed this is a legally binding agreement.

What is a Title search?

A search carried out to retrieve the document(s) relating to a property’s history. It includes the current status of the title, including the owner, legal description, easements, land covenants and mortgages.

What is a LIM (Land Information Memorandum)?

A LIM is a record of information on a property held by the local authority and includes rates details, any building consents granted, notices relating to the property or neighbouring ones, flood, erosion and contamination risks.

Many Sale and Purchase Agreements have a clause relating to a LIM so your lawyer can consider the LIM before the agreement goes unconditional.

Do I need a building or engineering inspection/report?

By obtaining a professional building and/or engineering report you will be alerted to any matters that may need attention. A building inspector will inspect areas of the house that are reasonably accessible. A normal inspection will cover:

  • Interior – services
  • Exterior – roof, roof space and sub floor
  • Site – potential for flooding, drainage, site conditions (retaining walls, etc.), run-off from adjacent ground
  • Other buildings on the title

For apartments, the inspector will generally only inspect the interior and balcony, if there is one.

What is a Code of Compliance?

A Code of Compliance (CCC) is a formal statement confirming that the building work carried out on a property is compliant to the building consent issued by a local authority.

An owner of a property owner must apply for a CCC once all the work has been completed and inspected.

What is a valuation report and why do I need it?

There are a number of reasons why people get a valuation report but most of these relate to financing a property either obtaining a mortgage or refinancing. The other reasons are for buyers to work out how much they should pay for a house and sellers how much the house is worth.

A valuation generally involves a registered valuer visiting the property to assess the market worth of the house. They will conduct a full inspection of the property and also look at the property’s title, council zoning maps and other comparable property sales.

What is a unit title?

These are common with apartments and it allows for multiple ownership of common spaces e.g. driveways, walkways and lifts.

What is a cross lease?

This is common with flats or townhouses and it is where a number of people share in the ownership of the land. The owners then lease to each other for 999 years the particular flat or townhouse.

What inspections do we need to conduct on a property before we purchase it?

It is a good idea to carry out:

  • A building inspection
  • An engineers’ inspection
  • A valuation
  • Any other professional advisors – this could include a company that does moisture readings

What are the different types of property ownership?

The majority of land in New Zealand has a fee simple or freehold title. This means that you can make changes to your property without having to change the title of your property.

A property can be bought in:

  • Sole ownership – one person owns the property
  • Co-ownership – more than one person owns the property. These types of ownerships can be in ‘tenants in common’ or ‘joint tenants’.

Tenants in common have a share of the property. This can be equal shares or differing shares. If a tenant in common dies, the share needs to be dealt with by Will.

Joint tenants own an equal share of the property. If a joint tenant dies, the share is passed to the other tenant (they will become the sole owner).

 

Mike Newdick - Residential property specialist

MD

Mike Newdick has enjoyed a successful career with Turner Hopkins since his graduation from Auckland University and admission to the Bar in 1986.

Becoming a partner in 1994, he practices in most areas of law, including commercial and contract matters, finance, property development, sale and purchase, company restructuring and creditor protection, trust and estate work.

Mike is a North Shore resident and actively involved in a number of local community activities, including being an established personality in the surfing world.

“Although Turner Hopkins is seen as a medium size law firm, we pride ourselves on being able to deliver a complete range of professional services.”

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